A Water Concessioners Porters 5 Forces Analysis

1. Rivalry among existing competitors- Low to Non-Existent. Since it is under concession agreement, there is no other water utility company that can engage any business similar to A Water Utility concessioner, unless granted by the government under special agreement and with full knowledge and approval of A Water Utility concessioner.

2. Threat of new entrants- Low to Non-Existent. Companies that may want to apply for the concession must first comply with government requirements and also must have a substantial amount of capital investment (around 6 Billion Dollars starting capital), not to mention the technical expertise to run and maintain a water utility company.

3. Bargaining Power of Supplier- Medium. Although the primary raw material of A Water Utility concessioner is water which is basically free, the materials used for distribution line maintenance and expansion are quite few. Though this is the case, A Water Utility concessioner still has a slight control on the pricing of these materials unless the raw materials for these items like resin, steel, alum coagulating chemical used in treating raw water), etc.

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increases.

4. Bargaining Power of Customer- Medium. This is due to the regulated tariff by the government under the MWSS Regulatory office which deals directly with A Water Utility concessioner.

5. Threat of Substitute- Low. The small water refilling stations also get their water from A Water Utility concessioner. With regards to larger water bottling companies, this is just a small portion of the pie which A Water Utility concessioner can manage to absorb. Other than water for drinking purposes, there is no substitute for A Water Utility concessioner’s service.

In summary, the water service providing business of A Water Utility concessioner is very viable with very little or non-existing threats of new entrants and rivals, with a very manageable bargaining power for both suppliers and customers and virtually no substitute. As a business strategy, A Water Utility concessioner’s main goal is to provide outstanding service to its customers for both water and waste water services and become a world class water utility company.